Riggs, Naomi; Angelowitsch, Genna --- "A distinction without a difference (VIC)" [2015] PrecedentAULA 81; (2015) 131 Precedent 47

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The Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) (the WIRC Act) was enacted with the purpose of simplifying the Accident Compensation Act 1985 (Vic) (the AC Act) while at the same time ensuring that there were no changes to workers’ benefits. What has resulted is a piece of legislation which largely re-enacts the AC Act but in a more logical structure. Practitioners are now faced with the task of identifying where the existing entitlements are now located within the new Act, and referring to the appropriate new section numbers. Despite three years of industry consultation prior to its enactment, the WIRC Act’s failure to address some of the long-standing anomalies within the system is clearly a lost opportunity. This said, practitioners should be aware of the subtle changes which have been made, which will have some impact on the way that matters are conducted.

The WIRC Act became operational as of 1 July 2014. It combined the AC Act and the Accident Compensation (WorkCover Insurance) Act 1993 into one piece of legislation and has attempted to present the legislation in a more logical, accessible order. The current structure of the WIRC Act can be broadly divided into the following key sequential parts:

Part	Issue	Section
1	How to claim	18, 20, 25
2	Who is eligible for compensation?	39-41, 46-47, 50 + Schedule 1
3	Responsibilities of employers	73
4	Return to work	110-145
5	Weekly payments	153-167, 179-194 + Schedule 2
6	Lump sum compensation	54-68, 195-221
7	Medical and like expenses	223-232
8	Resolving disputes	264-301
9	Common law	318-371
10	Self-insurers	372-412
11	Insurance and premiums	429-490

In 2010, amendments to the AC Act imposed new return-to-work obligations on a worker, which were detailed at ss200 to 204 of the AC Act.^[1]

Essentially, what was required was that workers co-operate with their employer and their insurer to return to work, with this obligation qualified by a test of ‘reasonableness’. These obligations have been re-enacted in the WIRC Act. What is new under the WIRC Act is that the follow-on obligations, to actively use an occupational rehabilitation service, to actively participate in fitness-for-work assessments and to participate in return–to-work interviews with the insurer, have now also been qualified by the introduction of the ‘reasonableness ‘test. This is an important qualification, as an insurer no longer has the power to terminate a worker’s weekly payments where there is a reasonable refusal to engage in occupational rehabilitation activities. This will address the previously not infrequent practice of insurers insisting upon workers attending appointments with occupational providers in situations where there was absolutely no possibility of return to work, and this was acknowledged even by those doctors engaged by the WorkCover insurer.

Similarly, prior to the enactment of WIRC Act, it was not uncommon for a worker’s benefits to be terminated simply because the WorkCover insurer had unilaterally decided that the worker had failed to attend appointments with the occupational rehabilitation provider. This would happen despite the claims by the worker that they did not receive notice of the appointments. This scenario would often play out where the worker was overseas for a period, had moved address or had changed telephone number. Prior to the 2010 amendments, termination of benefits could have been effected simply because the worker failed to attend the appointments, and no enquiry was required as to why the worker failed to attend. The new amendments require that a level of reasonableness must be exercised by the WorkCover insurer, involving some sort of enquiry by it as to why the worker cannot participate in the occupational rehabilitation activity.

Under the AC Act, s105(4) mandated that a worker who did not have a Certificate of Capacity was prevented from receiving weekly payments of compensation. The only way to overcome this was by making an application directly to the court (s105(4)). The WIRC Act has now introduced s26 which mirrors the old s105(4) but first requires the worker to apply to conciliation. The reasoning behind this change is that it was hoped by the drafters of the legislation that, through the process of conciliation, conciliators will be able to assist the worker to obtain a certificate of capacity, avoiding the requirement to participate in litigation.^[2]

The problem with this reasoning is that the WIRC Act has replicated s111(4) of the AC Act, which states that a Certificate of Capacity has no effect if it relates to a period more than 90 days from the time it was written. By the time a worker has realised that they are unable to obtain a Certificate of Capacity and made a referral to conciliation, any Certificate they had obtained will most likely relate to a period in excess of 90 days before the date of the Certificate. The result is that despite the fact that a conciliator may have been able to assist the worker to obtain Certificates of Capacity, the worker will still be prevented from receiving weekly payments. This is because the AC Act and the WIRC Act both mandate that weekly payments cannot be paid on Certificates of Capacity which relate to a time period of more than 90 days prior to when the Certificate of Capacity was written (s111(4) and s167(4)).

So long as insurers are prevented from paying on Certificates of Capacity which relate to a period in excess of 90 days prior to the date they are written, workers will continue to have to engage in lengthy and expensive litigation to obtain payment, despite the enactment of s26 under the WIRC Act. This is frequently played out in the courts; the most common scenario being that a worker has for some reason ceased employment and has been told or presumes that their weekly payments also cease and stop obtaining Certificates of Capacity. It is generally only after they unsuccessfully seek to obtain employment and then consult a lawyer that they are informed that in fact the ending of their employment does not mean that they are necessarily prevented from being paid weekly payments of compensation. By this time, however, it is generally in excess of 90 days from the date of capacity and the only way to obtain payment for that worker is to issue court proceedings. The continued requirement for these cases to go to court is an unnecessary use of the court’s resources and an anomaly which should ideally have been rectified in the redrafting of the legislation.

The WIRC Act has sought to clarify the basis upon which a worker’s pre-injury average weekly earnings (PIAWE) are calculated, by refining the definition of ‘ordinary earnings’. For most workers, the calculation of their ‘ordinary earnings’ is taken from the 52 weeks of earnings prior to their injury (where they have worked continuously for the same employer). This definition has always allowed for the inclusion of leave taken during the relevant calculation period so as not to skew the PIAWE calculations against the worker. However, the definition has now been amended to ensure that where leave has been taken, the ordinary earnings are taken to be at the worker’s base rate of pay. This amendment clearly operates to exclude additional income through leave loadings, which have the potential to increase a worker’s PIAWE and therefore the amount the insurer is liable to pay in weekly payments.

The necessity of this amendment is unclear, as the exclusion of leave loading has always been accepted as appropriate practice by WorkCover solicitors for both workers and insurers. However, the amendment to the definition of ordinary earnings in the WIRC Act has officially enshrined this approach in the governing legislation.

Magistrate Garnett’s judgment in Robinson v SPI^[3] limits the court to having jurisdiction over only those matters claimed for in the original worker’s claim form. This presents an ongoing problem, as the claim form confines workers to indicating that their injury occurred on a specific date. The result is that many workers are subsequently required to put in a new WorkCover claim specifying an injury to have occurred over the course of their employment. This process inevitably causes unnecessary expense and delay to all parties concerned, and continues to be an issue which frequently is missed by practitioners until it is too late and an adjournment of the Magistrates Court proceedings is required.

The WIRC Act has failed to address this issue and the legislative framework remains as it did when Robinson was decided. Curiously, in July 2014, WorkSafe Victoria issued new impairment benefit claim forms which reintroduced the ability for workers to indicate that their injury occurred over a period of time. This is a simple and obvious solution to the Robinson decision. Why this change has not been adopted in the initiating claim forms is unknown and, for now, practitioners need to remain vigilant about ensuring that workers’ initial claim forms accurately reflect the circumstances of their injury.

The WIRC Act is effectively a reorganisation of the Accident Compensation Act in a manner which is more easily accessible to practitioners who are not familiar with this area of law. In light of the complexity of this area of law, and the burgeoning tendency for practitioners to specialise in one area of law only, the necessity for this reorganisation is unclear. While WorkSafe has stated that the WIRC Act will not change the benefits that workers receive, there have in fact been some subtle differences as outlined above which may impact on workers’ rights. These minor amendments aside, our primary responsibility as a profession now is to familiarise ourselves with what is effectively the same piece of legislation but in a very different format.

Naomi Riggs is Senior Associate at Adviceline and practises in workplace and employment law.

Genna Angelowitsch is a lawyer at Adviceline and practises in workplace and transport accident law.

^[1] The amendments to ss200 to 204 were inserted by s129 Accident Compensation Amendment Act 2010 (Vic).

^[3] Robinson v SPI Electricity Pty Ltd (Unreported, Magistrates Court of Victoria, Magistrate Garnett, 3 October 2012).

Precedent (Australian Lawyers Alliance)

Riggs, Naomi; Angelowitsch, Genna --- "A distinction without a difference (VIC)" [2015] PrecedentAULA 81; (2015) 131 Precedent 47